Private power projects damaging a B.C. legacy

Gwen Barlee, Times-Colonist, May 14 2013

A Vancouver Island river renowned for its fish — including two endangered runs of steelhead and five species of wild salmon — is being dammed and diverted into a pipe to produce hydro power. Construction on the Kokish River, near Port McNeill, started last year, months after the provincial government allowed corporate giant Brookfield the rights to industrialize the river.

While the Kokish is a sad story, it isn’t the only river at risk in British Columbia. Over the last 10 years, 800 rivers, creeks and even lakes have been staked by corporations.

River-diversion projects, also known as independent power projects, were never supposed to be in fish habitat, according to the provincial government, but today 72 per cent are located in known or suspected fish-bearing waters. Due to lax environmental standards and significant cuts to regulatory agencies, non-compliance at IPPs is rampant.

But even if the projects weren’t located in fish habitat, left more water in the river and had far better environmental practices, there would still be a deal-breaker: the impact to B.C. Hydro.

B.C. Hydro is our public hydroelectric utility. For 50 years, it has provided us with reliable low-carbon power, long-term planning, energy security and billions of dollars to fund our schools, hospitals and libraries.

Today that legacy is in deep trouble.

Because of a deeply misguided government policy that forced B.C. Hydro to purchase energy it didn’t need, our public utility — and the people of this province — are on the hook for $54 billion in sweetheart energy-purchase agreements to IPPs. Now, far from being a revenue generator, B.C. Hydro is forecast to lose a billion dollars over the next four years.

What happened?

Thanks to private power companies, B.C. Hydro now has a surplus of very expensive IPP power, which B.C. Hydro is being forced to sell at a massive loss. It is sobering to recollect that in the last call for power, B.C. Hydro was required to issue contracts to IPPs for $125 per megawatt-hour — well over double market prices. In fact, B.C. Hydro can currently purchase surplus hydro power from south of the border for as low as $10 a megawatt-hour or less. This represents a squandering of public dollars that is mind-boggling to say the least, and appears to lead to only one conclusion: a bankrupting of B.C. Hydro.

To make matters worse, there has been no planning for IPPs. Projects are located in endangered spotted-owl habitat, sensitive grizzly-bear recovery areas and important salmon streams. Local governments have had their zoning authority removed and no longer have the ability to protect rivers that are important to their communities. Astoundingly, at one project near Whistler, when a government biologist requested that more water be left in the river to protect salmon, the company refused to do so, citing an impact on their profits.

Private power producers are hoping that B.C. Hydro will use their energy to power liquefied natural gas terminals. This is a pipe dream; not only is IPP energy too intermittent and undependable to run these plants, but LNG producers consider it to be far too expensive.

B.C. Hydro is left holding the bag with a “buy-high, sell-low” strategy that is particularly problematic during “spring freshet,” when rivers run high from melting snow and produce a lot of power. In the Pacific Northwest, this situation drives power rates down to something called “negative pricing,” where sellers actually pay buyers to take the power. Over the past two weeks, energy prices have already dipped into negative pricing. B.C. Hydro can’t take advantage of this golden opportunity because of its contractual obligations with IPPs.

Some people, who haven’t looked carefully at the complexities of this issue or who don’t value our publicly owned utility, believe IPPs will make B.C. an energy powerhouse. But in reality, every time B.C. Hydro is forced to issue another overpriced contract to an IPP, it impoverishes us — driving our utility, and our best tool against climate change, further into crippling debt.

The B.C. government needs to find a way to sever the contractual obligations between B.C. Hydro and private power producers, and it also needs to close down those operations which cause unacceptable damage to our environment.